What is the recovery of an MG based on? Here's the scenario:
Remote WAN site with a S8500 ESS, and G650 stack of cabinets.
The same site also has a G430 w/ S8300 LSP

The G430 is registered to a local CLAN, with a second choice of a CLAN in the core, and finally after the transition point the LSP.

In the event of a WAN failure, assume that the G430 ends up on the LSP before the ESS has recovered the G650 port network (so the local CLAN is still down).

If the recovery rule is set - the WAN is still down - but the local CLAN (first point of registration for the G430) comes back up will the G430 recover back to the CLAN board? Or does the recovery rule depend on connectivity to the main S8800 controller pair across the WAN?

Long story short - does the recovery rule look for the MGC list or the main server pair to determine it's OK to recover?

Please take a look at: "Example nine: LSPs working in an ESS environment" section in http://support.avaya.com/css/P8/documents/100059348 (Page 54)
The media gateway has a recovery variable timer design that incorporates three separate timers. The timers monitor the period of time that the server or gateway spends in a specific Link Recovery processes. If the timers expires before the ESS no service timer, the G350 Media Gateway and IP telephones automatically attempt to connect with an alternate C-LAN circuit pack within the original server’s configuration or to an LSP.
If the connection between the Branch Gateway (G430) and its registered MGC (S8730 - main CM server/CLAN) is lost, the Branch Gateway attempts to recover the connection. Use the set reset-times primarysearch command and the set reset-times total-search command to set the timeout for the Branch Gateway’s search for the primary MGC and the other MGCs on its MGC list, respectively. Use the set reset-times transition-point command to configure the point at which the primary MGCs in the list end and the LSPs begin.http://support.avaya.com/css/P8/documents/100120645 (Page 65) - CM 6.x orhttp://support.avaya.com/css/P8/documents/100059455 (Page 78) - CM 5.x
So what does this mean? considering the below example:
primary-search 20
total-search 40
transition-point 1
In the event of H.248 link lose from G430 to the primary controller, the G430 will spend 20 minutes trying to access the primary controller(s). that means, if we have more than one primary controller IP address administered, then G430 will loop through them. The transition-point defines when the primary controllers end and the secondary contollers begin (LSP). This is from the perspecrtive of the MGP (G430).
now, regarding the recovery timers: At the SAT, enter change system-parameters mg-recovery-rule 1 to display the System Parameters Media Gateway Automatic Recovery Rule screen. Once MG is registered to a secondary controller, we may use the recovery timer to get the G430 back to main server's control.
In your scenario:
CONFIGURED MGC HOST
---------------------
CLAN_1 (PN in main location)
CLAN_1 (PN in ESS location)
S8300 (LSP)
So as you mentioned, "in the event of a WAN failure, assume that the G430 ends up on the LSP before the ESS has recovered the G650 port network (so the local CLAN is still down)".
The answer to "If the recovery rule is set - the WAN is still down - but the local CLAN (first point of registration for the G430) comes back up will the G430 recover back to the CLAN board? Or does the recovery rule depend on connectivity to the main S8800 controller pair across the WAN?" - G430 will NOT try to leave LSP and return to primary controller until either:
1) LSP (S8300) is rebooted
2) MG recovery rule defines automatic return of MG to primary controller
3) If MG reboots/rebooted

So it depends on the timers administered.

As for "does the recovery rule look for the MGC list or the main server pair to determine it's OK to recover? ", MG will use the recovery rule to return from a secondary controller to primary controller.

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